Biz2Credit Identifies San Jose as # 1 Among Top 25 Cities for Small Businesses in 2020
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NEW YORK, May 6, 2021 (GLOBE NEWSWIRE) – Biz2Credit has identified San Jose as “America’s Best Small Business City” based on average annual earnings, credit scores, company age and Biz2Credit’s exclusive BizAnalyzer score, which takes into account the local business climate, including rents, labor costs, and tax rates. Biz2Credit reviewed the financial statements of 32,000 companies that requested small business loans – including companies that applied for PPP loans in 2020.
San Jose pushed San Francisco out of the top spot in the 2019 rankings. Other metropolitan areas in the top ten for small business growth in 2020 were: San Diego, Los Angeles, Boston, San Francisco-Oakland, New York, Tampa- St. Petersburg, Seattle and Sacramento. In these top 10 metropolitan areas, the top industries were: 1) professional, scientific and technical services, 2) retail trade, and 3) other services (except government). Although the cities located at the center of these metropolitan areas receive most of the acclaim, the Biz2Credit study measures metropolitan areas based on Census Bureau sectors, which encompasses a much more diverse range of businesses in a region than those of the urban areas of downtown.
Overall, the average annual revenues of small businesses in 2020 fell to $ 689K from $ 771K in 2019, a decrease of 10.6%. This reflects the direct impact of the economic toll of the coronavirus on small businesses, many of which have been forced to close due to pandemic mitigation efforts.
Surprisingly enough, average business owner credit scores rose 3.4% from 597 in 2019 to 617 in 2020. In fact, credit scores have increased across the board for consumers in due to the much higher savings rate due to pandemic closures. Based on Biz2Credit’s findings, the same holds true for business owners who might have saved on rent or other unpaid liabilities during government-mandated shutdowns.
“Relying heavily on credit scores is a poor predictor of business performance, but many lenders use them as a major factor in making business lending decisions,” said Arora. “To make smart lending decisions, a wider range of factors must come into play, especially when serving smaller businesses.”
Although real estate experts say suburban markets are booming because city dwellers want to escape the population density of urban areas and can work from home, new research points to strong economic fundamentals in big cities. keep them vibrant and attractive to small businesses. San Jose, California, a major hub for the tech industry, has benefited and maintained a strong economy for small businesses despite the pandemic.
“The Silicon Valley tech industry continues to thrive and San Jose is at the center of it all,” said Biz2Credit CEO Rohit Arora, one of the nation’s leading experts in small business finance, who supervised the research. “Miami, with its diverse economy, remains at the forefront. Just two years ago, it was the number one small business city in the country, and it still tops the list. It also benefited from being in a state where coronavirus mitigation restrictions on businesses were less severe.
For this analysis, Biz2Credit defined “small businesses” as businesses with fewer than 250 employees or less than $ 10 million in annual revenue. The 25 Best Cities for Small Businesses in 2020 (with 2019 ranking in brackets) are:
Ranking 2020 City (Ranking 2019)
- San José, California (4)
- Miami-Fort Lauderdale, FL (3)
- San Diego, California (6)
- Los Angeles, California (5)
- Boston, Massachusetts (8)
- San Francisco-Oakland, California (1)
- New York, NY (2)
- Tampa-St. Petersburg, FL (unrated)
- Seattle, Washington State (9)
- Sacramento, California (21)
- Orlando, FL (unrated)
- Washington, DC (7)
- Baltimore, Maryland (10)
- Denver, CO (unrated)
- Raleigh, North Carolina (22)
- Portland, OR (13)
- Philadelphia, PA (18)
- Saint-Louis, MO (unclassified)
- Charlotte, North Carolina (20)
- Chicago, IL (14)
- Riverside, CA (12)
- Minneapolis-St. Paul (25 years old)
- Detroit, MI (11)
- San Antonio, Texas (unrated)
- Phoenix, Arizona (16)
Tampa-St. Pete, Orlando, Denver, St. Louis, and San Antonio were previously not ranked in the 2019 study. Places that were ranked on the 2019 Biz2Credit list but not on the 2020 list this year were: Austin ( 15), Milwaukee (17), Cincinnati (19), Pittsburgh (23) and Atlanta (24).
Small businesses in technology hubs are booming. The Top 10 metropolitan areas by Annual revenue*
|1.||San Jose, California:||$ 1,280,602|
|2.||Miami-Ft. Lauderdale:||$ 1,056,919|
|3.||New York, NY:||$ 1,035,781|
|4.||Seattle, WA:||$ 1,022,581|
|5.||San Diego, California:||$ 1,019,886|
|6.||Los Angeles, CA:||$ 961,298|
|7.||San Francisco-Oakland:||$ 882,112|
|8.||Tampa-St. Pete, Florida:||$ 844,073|
|9.||Portland, OR:||$ 832,234|
|ten.||Washington DC:||$ 795,106|
* Average annual income measured in 2020 “A lot of these companies can easily allow their employees to work from home, which has actually been proven to increase productivity,” Arora said. “Places like Las Vegas, which thrives on tourism and related industries, have suffered a lot in 2020 due to the pandemic.”
Once sorted by Business Age (in months), cities in the Midwest and South had the youngest average business age, indicating start-up activity and growth. Indianapolis has emerged as a logistics hub, while the growth of new businesses in Phoenix, Dallas, Houston, and Orlando is an indication of demographic trends in which warmer, business-friendly state cities have become increasingly popular places.
The 10 youngest cities with the youngest companies (in months) were:
|3.||Dallas-Ft. Worth, TX||63|
|6.||Raleigh, North Carolina||65|
“With the exception of Indianapolis, which is a major logistics hub, start-up activity has been strongest in hot places like Phoenix, Dallas-Ft. Worth, and Houston, ”Arora said.
Once sorted by Credit score, technology hubs such as San Jose, San Francisco, New York and Boston posted the highest numbers.
|1.||San Jose, California:||650|
|4.||New York, NY:||638|
|7.||San Diego, California:||635|
|8.||Raleigh, North Carolina:||632|
|ten.||Tampa-St. Pete, Florida:||629|
“Credit scores are generally better in areas with high annual incomes,” Arora explained.
About the Biz2Credit Best Small Business Cities in America studyBiz2Credit analyzed 32,000 businesses with less than 250 employees and less than $ 10 million in annual revenue across the country that have been in business for over a year.
About Biz2CreditFounded in 2007, Biz2Credit has organized over $ 3 billion in financing for small businesses. The company is expanding its cutting-edge technology into customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @ Biz2Credit, Facebook, and LinkedIn.
Media Contact: John Mooney, (908) 720-6057, [email protected]